Amadou N.R. Sy

Amadou N.R. Sy is Deputy Division Chief at the IMF Institute where he teaches macroeconomics and finance. Previously, he has worked on financial stability and has led financial sector assessment and technical assistance missions. He has contributed to the IMF’s work on sovereign wealth funds and has published in a number of journals. His current research focuses on financial regulation, capital markets development, and Islamic finance. He holds a PhD in Finance from McGill University. He is a CFA Charter holder and a Certified Financial Risk Manager (FRM).

Papers Published in World Economics:

The Systemic Regulation of Credit Rating Agencies and Rated Markets

Credit ratings have contributed to the current financial crisis. Proposals to regulate credit rating agencies focus on micro-prudential issues and aim at reducing conflicts of interest and increasing transparency and competition. In contrast, this paper argues that macro-prudential regulation is necessary to address the systemic risk inherent to ratings. The paper illustrates how financial markets have increasingly relied on ratings. It shows how downgrades have led to systemic market losses and increased illiquidity. The paper suggests the use of ‘ratings maps’ and stress-tests to assess the systemic risk of ratings, and increased capital or liquidity buffers to manage such risk.

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